contract law essay

An example of original precedent

In accordance with judicial precedent, the judge of high court is bound to the decision of Court of Appeal. Judicial precedent is a system where a judge of a court makes a decision and the court at the same level as it or the courts below it in the Hierarchy of the Malaysian Judicial System are bound to follow the decision make by it if the illegal point, facts and situation in the case is similar as the case where the decision is made.

An example of original precedent is Donogue v Stevenson [1] , where the plaintiff sued the defendant after a friend of the plaintiff bought her a drink from the defendant. The drink contained decomposed snail and plaintiff became ill after dinking it. The House of Lords stated that the manufacturer is responsible (had a duty of care) towards their customers although the customers did not have any contract with the manufacturers.

A higher court can overrule the decision of the court below it and there after, the decision of the higher court will take over the earlier decision that is binding. For example, Smith, R v (Morgan) [1998] CA is overruled by Jersey v Holley [2005] PC. In Smith, R v (Morgan) [1998] CA, Morgan Smith killed his flatmate, James V after they got into a fight over some stolen tools. The defendant stated that he has no intention and was provoked when he killed his flatmate. However, he was still charge with manslaughter. [2] However, this case is overruled by Jersey v Holley [2005]. The defendant murdered his girlfriend. They both were alcoholic and the defendant stated he was provoked. The jury take into the account of the defendant’s characteristic and at last decided that the defendant has lost control of himself and free him from all charges [3] . Some courts are bound by their own decision, which means they can freely make the decisions themselves. In the question, the material facts are similar to the one decide by Court of Appeal in 2009. Since the High Court is lower than the Court of Appeal, the high court judge, Mr. Justice Peter has no other choices but must follow the binding decision made by the Court of Appeal previously. The system of precedent is closely related to the court structure in Malaysia. By referring to the court structure in Malaysia, the Court of Appeal is located at higher position than the High Court, thus the decision made by the Court of Appeal is a must for High Court judge to follow.

Besides that, the case law also known as judicial precedent is decisions made by judges previously in similar situations and are binding upon future cases depending on the hierarchy of the court. Once a precedent is made it remains binding until it is overruled by a higher court in a later case. If a similar dispute has been resolved in the past, the court is bound to follow the reasoning used in the prior decision.

Case law, also called as judicial precedent is the process whereby judges follow previously decided cases where the facts are of sufficient similarity. [5] There are advantages and disadvantages of case law as a source of law. Case law is the reported decisions of selected appellate and other courts (called courts of first impression) which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis.

The first advantage of judicial precedent is it can provide certainty in law, it means that if the case has been solved before, the court is bound to follow the solution. Thus, lawyer can advise their client the probable outcomes or the percentage to win the case in order to save their customers time and money. Besides that, it can also save the court time because most of the situations there are already exist with the solution to it. Thus lawyer can advise their client safely. Binding precedent relies on the legal principle of stare decisis. A definition of stare decisis means to stand by things that have already been decided. Besides that, consistency and certainty in the application of law is also ensures by the precedent. Analogy might be apply in the principle to new situations which the existing binding precedents from past cases.

Besides that, judicial precedent can also reduce legal cost because the case can be resolved or settled quickly since the problems is getting very obvious and similar to case before it. Case law is created so that it is fair to everyone. Most of the same cases are treated in a similar way, this is in the interests of fairness and justice where everyone is treated equally. The judge has the power to order which parties will pay the attorney's fees and other disbursements of the parties. The law of costs defines how such allocation is to take place. Judicial precedent has lower legal cost compare to others.

In addition, predictability is also one of the strengths of case law. Predictability is the degree to which a correct prediction or forecast of a system's state can be made either qualitatively or quantitatively. It is able to forecast the outcome of the case and helps to declare or indicate in advance on the basis of observation cases.

Practical in nature which the decisions are made based on real problems, real people and thus the decisions are usually practical and workable. They are the result of the consideration of real situations which have come before the courts.

Lastly, personality of the judges will not influence the outcome of an argument in court as judges will be bound to follow previous decisions. For example, if the judge dislikes an individual who dye their hair gold in colour, he might resists to give the individual a fair treatment and this can influence the outcome of the whole case. Thus, high court must follow the decisions that made by the court of appeal.

Besides, time saving is also one of the advantages of case law. This is because it uses back the whole things that follow the previous decisions. There will be increase billable time if there are the decreases of the time on cutting and pasting or making multiple entries of the same information throughout a case and decreases the time spent by attorneys or staff authoring law forms.

However, there are also disadvantages of case law. When there is too much case law, it is impossible for someone to find it and learn all of it. Moreover, it may be very confusing and time consuming to trace back the case law. The citation of authority in court should be kept within reasonable bounds because it can be costly in terms of time and money.

Case law method sometimes is said to be rigidity and not flexible which may sometimes cause trouble. It is not flexible because it has no space to allow new law to develop as the case is binding until it is being cancelled or overruled by another case. Hence, it causes inflexible and incapable for the law in adapting or changing to meet circumstances.

Next, the convenience of following the precedent should not be allowed to become the exercise performed blindly without any thought. Everyone just simply follow the precedent which are sometimes unfair to the defendant. The most important things are the law need to be always based on practical experience. The case law is limiting the development of judge-made law.

At last, the disadvantages of case law will be very costly and slow because the system depends on litigation and which tends to be slow and expensive the body of case law cannot grow quickly enough to meet modern demands. The more money you need to pay if it takes a longer the time to finish the litigation.

Question 2

On the 29th October 2010, Steven advertised in the NewFocus Paper for selling Yamaha Piano latest model at RM15000.

From the issue above, the facts show that Steven had advertised his piano in the newspaper. In this situation, an advertisement is known to be an invitation to treat but this may differ on the case basis depending on the intention of the parties. An invitation to treat [6] was defined as where a person to invite another person to make an offer to form a contract or agreement. The distinction is important because if a legitimate contractual offer is accepted by another, a binding contract is immediately formed and the terms of the original offer cannot be further negotiated without both parties consent. A request for expressions of interest might be seem by an invitation to treat.

This principle was upheld in the case of Pharmaceutical Society of Great Britain v. Boots. [7] The defendant was operating a certain product that to be sold only under the supervision of a registered pharmacist. The product was displayed on shelves in a self-service shop. The issue was whether the sale was completed when the goods was selected or at the cash desk. The customer having selected the goods made an offer to purchase when he took to the cash desk, and there was a registered pharmacist supervising that point at which the sale took place. The court has decided that the plaintiff is cleared from charges as the plaintiff is the offeree who just accepts the offer made by offeror.

The fact clearly shows that Steven is making an invitation to treat as his intention clearly show that he is inviting the public to make an offer of RM15,000 for the piano.

On the 1st November 2010, Tanny offered to buy the piano at RM10000.

In this situation, an offer is occur. Offer [8] is defined in Section 2(a) Contracts Acts, 1950 as ‘when one person signifies to another willingness to do or abstain from doing anything with a view to obtaining the assent of that other to the act or abstinence he is said to make a proposal’. Tanny is willing to pay RM10, 000 to obtain the piano, so it can be said that she is making an offer.

The principle was upheld in the case of Carlil v. Carbolic Smoke Ball Co. [9] In this case, the defendant promised to pay £100 to anyone who gets ill after consuming their smoke ball and used them as directed. The defendant showed its sincerity by depositing £1000 in a bank. The plaintiff, who consumes the defendant product and caught flu, sued the defendant for not paying her. The defendant stated that the advertisement was invitation to treat. However the court made a decision that it was actually an offer.

However, Steven rejects to sell it at below RM14, 000 and will not sell it to anyone else before 7th November 2010.

Since Tanny offer RM10, 000 to buy the piano but Steven rejected to accept the offer. The reply of Steven is treated as counter offer. Counter offer [10] can be defined as an offer made in response to a previous offer by the other party during negotiations for final contract. In the other hand, counter offer will operate as a rejection of the original offer. It is a new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.

This principle was upheld in the case Hyde v Wrench [11] . Wrench offered sell his estate to Hyde for 1200 pounds and Hyde declined. Wrench then offered the farm for 1000 pounds. Hyde decided to counter the offer of the property for 950 pounds and Wrench took times to consider the offer. However, Hyde later changes his mind and wanted to buy the farm for 1200 pounds which Wrench refused later on. Hyde then took legal action on Wrench. The judge ruled that the previous offer cannot be revive. This offer was refused and subsequently, the initial offer was sought to accept by the plaintiff, Hyde. In this situation, ther was held no contract was made as the initial offer did not exist at the time that Hyde tried to accept it, thus, the counter offer was terminated.

Tanny went to Australia for a few days and came back to Malaysia on the 7th of November 2010. On the 8th of November 2010, Tanny decided to post a letter accepting to buy the piano for RM14000.

Steven received the letter posted by Tanny on 11th November 2010. However, in this situation postal rule is not applied due to the expired offer. Postal rule states that the acceptance by post and the letter must be write in the correctly addressed and stamp and placed in the post, the offeror also must be aware that the acceptance is accepted via post. While, it excludes contracts involving land, letters incorrectly addressed and instantaneous modes of communication. Acceptance only can be created when it is communicated directly to the offeror. This means that Tanny has rejected the Steven’s offer.

This principle was upheld in the case of Adam v Lindsell [12] . From the studies, postal rule is for acceptance only not for offer. D offered to sell P some wool and ask P to reply using post. However, the letter was delayed 2 days in post and thus the acceptance letter received late 2 days. In these 2 days, D sold the wool to someone else. The court had made a decision that P is entitled to damages as his acceptance is completed when his letter is put in the post, before D sold the wool to someone else. When there is no offer, it is impossible to accept by post thus postal rule is not applied and the letter of acceptance is not valid.

On 11th November 2010, Steven received the letter posted by Tanny.

On the date when Tanny posted the letter to Steven after the expired date, the letter has become an offer letter to Steven and it shows that Tanny is making an offer to buy the piano of Steven at RM14000. In this situation, Tanny becomes the offeror and Steven became the offeree, Steven can consider whether to reject or accepting the offer by Tanny. Section 4(2)(a) CA states that communication is complete against the offeror when it is put in the course of transmission to him so as to be out of power of the offeree. It means that when the letter is put into the post, the offeree is said to be accepted the offer although the offeror does not receive the letter. In addition, Section 4(2) (b) CA states that the acceptance is complete against the offeree when it comes to the knowledge of the offeror. It means that if the offeror knows about the acceptance, the offeree has to follow the agreement that has been agreed.

This principle was upheld in the case of Felthouse v Bindley [13] . As from the knowledge get from the case, a builder named Uncle Paul Felthouse who lived in London was interested to purchase a horse from his nephew, John Felthouse. [14] He had discussed with his nephew the purchase of a horse belonging to him. However, there was a misunderstanding about the price, as Uncle Paul Felthouse believed that he had purchased the horse for £30, and the nephew believed the horse had sold for 30 guineas. Thus, Uncle Paul Felthouse wrote his nephew offering to split the difference. In the letter, Uncle Paul Felthouse stated that if he did not receive any response from his nephew he might assumed the horse was his for £30.15. The nephew did not reply, because he was busy at auctions on his farm in Tamworth. However, the nephew told the man who runs the auctions named William Bindley that the horse will not be sell to anyone. By mistake, Bindley allowed the horse to be put up and sold. In the end, Uncle Felthouse sued Bindley for damages of conversion. An explanation for this is Bindley was using the owner, John Felthouse property that is inconsistently with his rights. On the other hand, Uncle Felthouse had to show that there was a valid and relevant contract to support the horse was his property. Perhaps, Bindley disagreed and argued there was not, since the uncle’s offer had never communicated with the nephew.

In this case, Tanny letter of acceptance (on 8th November 2010) because it is not valid as the offer has expired for a day (on 7th November 2010). As a conclusion, Steven has the right to sell the piano to someone else beside Tanny.

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